Loan Guarantee Up to 80% of House Price for First-Time Home Buyers

Jugeumgong Guarantee Product Launches on 31st
Loan Guarantee up to 80% of Housing Price
Maximum Limit is 35% of House Price, 300 Million Won

Example of First-Time Special Purchase Fund Guarantee Application (Provided by Korea Housing Finance Corporation)

[Asia Economy Reporter Minwoo Lee] The Korea Housing Finance Corporation is launching a guarantee product to support first-time homebuyers in obtaining mortgage loans up to 80% of the housing price. Although the government relaxed the loan-to-value ratio (LTV) to 80% for first-time home purchases starting in August, banks have been reluctant to provide loans due to concerns about potential defaults, prompting the Housing Finance Corporation to offer guarantees.

On the 30th, the Housing Finance Corporation announced that it will launch the "First-Time Special Purchase Fund Guarantee" product on the 31st. The guarantee is available to first-time homebuyers under the "Banking Supervision Regulations" (where no household member has previously owned a home) who apply for a mortgage loan for actual residence purposes. Eligible homes must be priced at 900 million KRW or less and must not be leased.

If the loan amount available from the bank is less than 80% of the housing price, the difference can be additionally borrowed through the corporation's guarantee. For example, when purchasing a home priced at 400 million KRW for the first time, a loan up to 320 million KRW (80%) is possible, but if the bank only lends 260 million KRW, the remaining 60 million KRW can be borrowed through this guarantee product. However, the additional loan amount guaranteed by the corporation cannot exceed 35% of the housing price or 300 million KRW.

The First-Time Special Purchase Fund Guarantee can be applied for simultaneously when applying for a mortgage loan at the bank. The participating banks include 13 institutions: Gyeongnam Bank, Gwangju Bank, KB Kookmin Bank, IBK Industrial Bank, NH Nonghyup Bank, DGB Daegu Bank, Busan Bank, Suhyup Bank, Shinhan Bank, Woori Bank, Jeonbuk Bank, Jeju Bank, and Hana Bank. The guarantee fee borne by customers is calculated based on the guarantee amount, guarantee period, and guarantee fee rate. The fee rate ranges from 0.05% to 0.20%, determined by housing type and credit rating.

A representative from the Housing Finance Corporation stated, "The launch of the First-Time Special Purchase Fund Guarantee will help real demand buyers secure funds for home purchases," adding, "We will continue to actively support housing finance for real demand buyers."

This content was produced with the assistance of AI translation services.